Preparations completed to bring natural gas under GST ambit, these companies will benefit along with the common people.

There has been talk of bringing natural gas under the ambit of GST.  According to information received from sources, it can be brought in the next GST Council meeting. According to sources, it is easy to bring natural gas into GST due to the presence of feed stock and two states which are big natural gas producers. Among them, Gujarat has agreed to this proposal.

Preparation to bring Natural Gas under the ambit of GST – An agreement has been reached between the Petroleum and Finance Ministry. There is discussion about imposing 18% GST on Natural Gas.

The proposal has been sent to the Fitment Comment for discussion. Gujarat, a big gas producing state, has given its consent. States charge 14%-24.5% VAT on Natural Gas.

All the states earn about Rs 20000 crore from VAT. GST rate will be kept revenue neutral.

Why so? Experts say that the ITC of companies gets stuck due to VAT regime. Natural Gas is Feedstock for many products. Which includes products like fertilizer, CNG, LPG.

When will the council meeting be held- Let us tell you that the GST Council meeting can be held at the end of August.

• This will directly benefit the common man as well as the companies – a big brokerage house has mentioned this in its report.

• If natural gas is brought under GST, it will benefit oil exploration and production companies.

• These companies include Oil and Natural Gas Corporation (ONGC), Oil India and Petronet LNG.

• Morgan Stanley report says that if it is implemented properly then it can benefit the entire gas value chain.

• Oil exploration and production companies will benefit the most from this. Brokerage expects ONGC’s standalone earnings to grow by 5%.

• 3-4% growth is expected for Oil India. The reason behind this is the possible compensation of investment and costs related to gas production.

• CNG- Compressed Natural Gas distributors will pass the benefit of low price of gas to the customers.

• The brokerage house expects that Indraprastha Gas Limited and Gujarat Gas will benefit because gas may become the priority of more people than alternative fuels. This will increase the volume of these companies.